HUD can't assure assisted living grants given properly, says IG

The Department of Housing and Urban Development does not always ensure that grants for assisted living facilities go to assisted living projects and HUD's field offices lack needed program knowledge to ensure grants will go to eligible applicants, says the agency's office of inspector general.

In a Jan. 4 report (.pdf), HUD's OIG says the agency issued 19 grants worth a total of nearly $70 million from fiscal 2008 to 2010 through the Assisted Living Conversion Program to private, non-profit development owners to convert dwelling units into an assisted living facility.

In its report, the OIG says that 9 of the grants contained items or were for construction activities that did not directly relate to the conversion of units and common space for assisted living. The agency also failed to ensure that the performance period for six of the grants was under an 18-month threshold.

These lapses occurred because "HUD lacked procedures and controls for identifying ineligible activities" and the agency can't determine how much the unqualified construction items cost in these projects because its reporting requirements have contractors list budget costs by general sections, such as concrete and masonry.

The agency did not adequately prepare its field offices to understand program requirements when approving and reviewing grant applications, says the report. Field office staff said the lack of guidance led them to develop their own oversight and application processing which varied among the offices, says the OIG.

The unclear guidance also led to grantees getting payment disbursements even if they did not submit required biannual progress and financial reports. Field offices also failed to conduct bimonthly inspections for five grants and performed no inspection for one of the grans.

The report recommends that HUD review all 19 applications, identify ineligible items and seek reimbursement from the grantees or adjust the awards for active projects accordingly. It even suggests meeting with HUD's Office of General Counsel over these ineligible items.

The agency should also implement controls for applications and on-site reviews, to ensure projects are completed properly and in less than 18 months, says the OIG.